[Xinmin Evening News] Protection of IP Rights Supports the Business Environment

April 25, 2019, Xinmin Evening News, 3rd Edition

(Song Ninghua) Tomorrow is the World Intellectual Property Day. Yesterday, in the quaint and elegant Science Hall, lively conversations happened between the judges of Shanghai Intellectual Property Court and business representatives.

“Today, more and more multinational companies are choosing China as their jurisdiction when they get involved in lawsuits. This is the biggest proof of increased protection of intellectual property rights in China,” said a person from a multinational company.

His words quickly resonated with representatives of other companies. The head of another multinational company gave the numbers: “Our software piracy rate has fallen by nearly 20% over the past decade, which suggests that the jurisprudence of Chinese courts has served as a good example to deter the infringers.”“

China’s intellectual property protection is making a stunning leap forward. “We should significantly raise the cost of breaking the law and give full play to the role of legal deterrence.” That’s what General Secretary Xi Jinping said about intellectual property protection at the opening ceremony of the 2018 annual meeting of the Boao Forum for Asia. Strengthening the protection of intellectual property rights is the most important part of perfecting the property right protection system, and it is also the biggest incentive to improve the competitiveness of China’s economy. Foreign and Chinese enterprises are equally demanding in this regard. Protection of intellectual property rights has become an important aspect of shaping a good business environment.

Significantly raising the cost of breaking the law is the trend of market economic development, and an urgent desire of enterprises wishing to make innovations and breakthroughs. According to the White Paper on the Intellectual Property Trials by Shanghai Courts in 2018 issued by SHPC, in the first instance copyright disputes, disputes over the dissemination rights of information networks and over computer software have increased by 69.73% year-on-year, indicating the existence of risks and challenges in copyright protection and management when Shanghai’s cultural and creative industries and network information industries are thriving. The first instance unfair competition disputes have increased by 319% year-on-year, indicating that with the continuous innovation of business models and the increasingly active market activities, the market competition behavior needs to be regulated urgently.

Innovation is the No.1 driving force for development. In Shanghai, with the development of new industries and new technologies, the number of intellectual property disputes has increased significantly, so has the compensation for infringement. The largest amount of compensation is as much as RMB 99 million. However, according to the Copyright Law, copyright compensation shall generally take into account the actual loss and the uncertainty of the right holder, so the maximum amount of compensation does not exceed RMB 500,000. Because of theproblems including “difficulties to get evidence of infringement, the long period to get protection for patent, and the low remedies awarded”in intellectual property cases, there can be such embarrassment where the party “wins the case but loses the market.” During this year’s two sessions of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), a member of the CPPCC proposed to amend the Copyright Law to raise the maximum amount of compensation in order to strengthen protection of intellectual property rights.

Therefore, it is urgent that the relevant judicial departments should innovate the ways of trial, and guide the owners of intellectual property rights to enhance the ability of litigation, so that infringers dare not wanton. Dassault, a computer software company, found that its software had been infringed. After complaints, 8 sets of infringed software were seized in the administrative law enforcement. The two sides signed a procurement contract on genuine software, and the administrative authorities also made a decision on administrative penalties for the infringer. However, the infringer did not pay according to the contract. So Dassault applied to Shanghai Intellectual Property Court for pre-litigation evidence preservation. During the spot check, it was found that the defendant had actually intensified its infringement by installing the infringed software in 15 computers. Considering the degree of subjective malice in expanding the scale of infringement and the price of the software have significantly exceeded the maximum amount of statutory compensation, the court ordered the defendant to pay a huge compensation of RMB 9 million. This case is very typical as it shows Shanghai court’s decision to increase the compensation for infringement of intellectual property rights. It can been seen as an example which a helps the establishment of a business environment where intellectual property rights are respected and protected.

An environment featuring the rule of law is the best business environment. “As a micro-enterprise, we have been relying on innovative technologies to survive in the market through all the years. The one thing that worries us most is infringement of intellectual property rights. The employee would “steal” the technology as he leaves the company. And many customers are doing business with us online. We can do nothing about it if we lose those people.” said a person from a micro-enterprise in the symposium. The fundamental purpose of the patent system is to stimulate innovation. Only the patent is effectively protected, can it promote innovation and ensure the smooth development of the enterprise.

To this end, along with technological innovation, the innovation of judicial trial has also been imminent. For example, to solve the problem of long process in patent cases, professional technical investigators have been introduced to help the judges determine disputes accurately; applying the mechanism of advance adjudication according to the law: in the process of dispute settlement, advance adjudication can be applied to the identified facts of infringement, which would stop the infringement as quickly as possible, so that there will be no such tragedy as “winning the case but losing the market.”

Today, intellectual property courts have been established in Beijing, Shanghai, Guangzhou, and the work has been done creatively, with the initial discovery of specialized intellectual property trial with Chinese characteristics. By 2020, intellectual property courts will be established across the whole country, and by 2035, the people’s courts will basically modernize the intellectual property trial system and trial capacity, which will greatly enhance their international influence and authority. It is hoped that in the near future, China’s intellectual property courts will become the “preferred” option for the concerned parties to settle the international intellectual property disputes.


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